Film Production Hot Costs – Webinars?
July 23, 2011 5 Comments
A young man, newly starting as a Key Production Accountant, asked me about Hot Costs. Below is the response that I wrote to him. It occurred to me that a lot of people have asked for a template of the Hot Costs that I use and perhaps there is a demand for a webinar on Hot Costs. Have a look at the info below and please give me your comments.
Hi, Erik. Helene passed along to me your emailed questions. First of all, I’d like to congratulate you on your new key accountant position.
1. On the Hot Cost template that I sent you the 0.74 is a conversion rate of CN$ to US$. For your purposes make it a 1.
2. TA ia “Turnaround”, a common term for “Rest Violations”.
On your question about doing a webinar on Hot Costs – I like the suggestion.
Background of Hot Costs:
The basic concept behind any hot cost is to estimate the cost of the actual day with the budgeted day. Labor is the biggest area looked at. In any labor calculation (cast or crew) you’re looking at:
– Meal Penalties
– and, Rest Violations (Turnaround).
Over the years I’ve worked out this particular format for myself, but it doesn’t have to be as elaborate. For instance, when Hot Costs first started to be used, in the early 90’s, myself and the UPM would sit together and rough it out with a few pencil scratch marks on the back of the daily production report (i.e. the average time for all grips and elec’s was 14 pay hours x 11 of them at an average rate of pay, then compare that result with the budgeted number of pay hours x the same average rate of pay. We’d do that for each department, as well as the drivers, add it up and say – there’s your number).
However, as the majors grew more and more cost conscious we were forced to become more and more detailed oriented. Also, some UPM’s and studios will challenge your Hot Cost results, so it behooves the production accountant to have a tidy schedule ready to answer their questions.
Film Payroll and Hot Costs:
I’ve never done a workshop on Hot Costs, only because you first need to know Film Payroll, then you need to know “If” statements in Excel. So, the course on “how to do Hot Costs” reduces to either, or both, a film payroll workshop or Excel programming workshop.
Regardless of your geographic location, I teach all the fundamentals of film payroll (as well as film accounting, managing film budgets, etc). The unions covered are:
SAG, DGA, IATSE Low National Budget and IATSE Area Standards rules. (i.e. not the West Coast IATSE Basic Agreement, nor the New York locals). NOTE: The IATSE Basic Agreement as applied on the West Coast, and the New York union rules, are very similar, but there is variation among the Basic Agreement Locals which can be looked up once you understand the basics of film payroll.
Let’s see if others are interested:
Having a webinar on Hot Costs is a good idea, though. Hopefully, those who attend will already have a handshake idea of film payroll, as well as a good grasp of Excel.
I’ll propose it on my blog and see what sort of response I get.
Thx for your kind words about the usefulness of the recorded videos of the on-line webinars. I’m pleased that they helped you.
Best / John